On September 23rd, UXLink, an AI-driven Web3 social network, experienced a security incident.
This security compromise resulted in the unauthorized generation of its associated cryptocurrency, leading to a dramatic plunge of over 90% in its market value.
The problem surfaced when the platform’s development team detected suspicious activity involving their multisignature digital wallet. They subsequently discovered significant quantities of cryptocurrency being moved to both centralized and decentralized exchanges without proper authorization.
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UXLink promptly contacted these exchanges requesting them to suspend any unusual transactions, and also notified law enforcement agencies. The company reports that several exchanges successfully managed to freeze a portion of the illegally obtained digital assets.
Following confirmation of the security breach in the digital wallet, the team announced that the perpetrator had initiated the creation of new UXLINK tokens without the required authorizations.
Initial reports from PeckShield indicated the unauthorized creation (minting) of 1 billion tokens. Later observations revealed an additional 1 billion tokens were minted. However, blockchain security specialists at Hacken discovered that the attacker generated nearly 10 trillion tokens overall.
Despite the massive token generation, the hacker only managed to exchange approximately 9.95 trillion tokens, receiving in return about 16 Ethereum
As a direct response, UXLink has requested exchanges to temporarily halt the trading of its token. Furthermore, the company stated that they are developing a token replacement strategy aimed at preventing further financial damage.
In their most recent communication, UXLink stated that they have submitted a revised smart contract for a thorough security assessment.
Ironically, even while conducting the exploit, the perpetrator became a victim themselves. Information from Lookonchain revealed that the hacker lost over 500 billion UXLINK tokens due to a phishing scam.
In related news, Raivo Plavnieks, a content creator from Latvia who was raising funds for cancer treatment, recently lost over $31,000 in cryptocurrency. Want to know how? Read the full story.